Great Expectations
For Private Water
Fail to Pan Out

FELTON, Calif. -- To RWE AG, Germany's biggest electric company, the water business a few years ago seemed to promise a gusher of profits. Governments in the U.S. and around the globe were eager to privatize their water systems. RWE was already experienced in delivering electricity and gas to millions of homes.

But dreams of heady profits evaporated amid heated opposition in places like this town of 6,500 people, in California's coastal redwood forests. Today, RWE is in the midst of dismantling an international water...